Parsing The Recent Bad News: Financials Are Undervalued

By Global Value Investor:Uncertainty is back. And it hit investors right in the face and from all sides: Greece is likely to leave the eurozone, a socialist was elected in France, Spain's banks were downgraded, JPMorgan (JPM) suffered derivatives losses and the Facebook (FB) IPO failed. A lot to take for investors, or, in other words, a great time to buy.Negative news has dominated the headlines for a few weeks now, which led investors to sell-off stocks in a big fashion. Cisco (CSCO) had to sacrifice some billions in market capitalization after its earnings release last month (which was good nonetheless) and even Apple (AAPL), which has held up quite nicely over the recent past, is down about 12% since April.I am short AAPL as a portfolio hedge and because I am influenced by who the marginal investor in AAPL stock is. The shareholder profile is less stable as short-term orientedComplete Story »

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This post Got Tech Stocks? Sell These Flops Now… appeared first on Daily Reckoning.
Stocks started higher yesterday. And it looked like we were looking at a much-needed comeback day to steady this wobbly market…
But no. Just before the closing bell, sellers crashed the party and squashed what was left of the rally.
That ain’t exactly bullish, my friend. That Santa Claus rally might have to wait till next year.

Bratislava (AFP) - The eurozone's poorer former communist nations, having themselves endured painful reforms and austerity programmes, are taking a hard line on Greece after its people voted to reject creditors' bailout terms.

MUMBAI: The 1607-point decline on the Sensex in the past two weeks has unnerved many investors, but there could be more pain in store. May has historically been a bad month for stocks -in the past 24 years, the average monthly return of the Sensex has been a niggardly 0.24%. This weakness is a global phenomenon, which has led to the coining of the popular stock market adage: "sell in May and go away." Though it is called the May effect, the correction doesn't strictly correspond to the calendar month. As is the case this year, the weakness sets in mostly in April.

The action in Apple (AAPL) merits some discussion. As you know by now the earnings report disappointed the street, the stock sold off in shocking fashion after hours on Wednesday and the selling persisted on Thursday closing at $450.50 down 12.35%. It sold down a little more after hours yesterday to $448.20 (the last I looked).

Is good news about to become the ultimate bad news. JPMorgan's Michael Feroli notes that (for the first time in recent memory) is pulling forward their projected date for Fed tightening and the inevitable end of the free-money cycle. Based on a belief in the committee's limited appetite to wait in inflation and today's report, JPMorgan notes a Q2 tightening seems plausible.

By David Alton Clark:JPMorgan (JPM) scheduled an unusual conference call following the release of its 10-Q filing. The lender says its Chief Investment Office (CIO) unit has suffered significant mark-to-market losses. S&P has downgraded the bank's servicing unit to Average from Above Average.

By BubbleBustInvesting:Those who have been expecting Apple (AAPL) to announce a dividend payout or a stock buyback in its Thursday shareholder meeting to enhance shareholder value must have been disappointed. But do dividend payouts and stock buybacks enhance shareholder value?

Philip Mause submits: I think it was Warren Buffett who said that in the long term the market is a weighing mechanism but in the short term the market is a voting mechanism. Sometimes, the investment community just doesn't bond with a company or a CEO and the market as a "voting mechanism" produces a horrible drubbing at the polls.

David White submits:Cisco Systems (CSCO) reported earnings of $.40/share. Cisco beat by $.05. Quite a margin for a company this size. Sales were $9.8 billion, up 8% year over year. The expectation had been for $9.4B in sales. Chambers said Cisco would see fiscal third quarter sales growth between 23% to 26%.